Magazine

The Impact Of Rupert's Empire

January 18, 2004

Rupert Murdoch's successful purchase of a controlling interest in DirecTV completes this remarkable entrepreneur's dream of building a global media empire. It is the latest bombshell to drop in a media industry engaged in a competitive arms race to bulk up on programming and distribution. In any other industry, the effort to boost size and scale to compete in a global market makes sense. But the growing concentration among the providers of news to the American, British, and other publics around the world should give us pause. Efficiency is a capitalist virtue that is essential in the marketplace, but diversity of views is critical to any voting democracy.

Control of DirecTV gives Murdoch a global satellite distribution system and a unique set of powers. At any one time, as many as one in five U.S. households will be tuned in to a show News Corp. (NWS) either produces or delivers. In response, cable and media rivals such as Comcast Corp. (CMCSK) and Time Warner Inc. (TWX) are moving to bulk up as well. Comcast recently paid $54 billion for AT&T Broadband. It is buying regional sports rights, offering telephone and two-way Internet interactivity over its cable lines (satellite can't do all that yet), and locking in relationships with programmers such as Viacom Inc. (VIA).

In Britain, Murdoch crushed his cable rivals by introducing new technology and cutting prices on digital boxes. His satellite delivery systems are now powerful distributors of TV programs in Britain, as well as Italy and wide swaths of Asia and the Middle East.

Murdoch will now become a significant gatekeeper of programming to American homes, along with a handful of other media moguls. Federal Communications Commission Chairman Michael K. Powell argues that there is nothing to fear from this concentration because there are hundreds of channels out there providing information. There's the Internet, too. But the reality is that most Americans still get their news from just a few sources, and many of these are being absorbed into conglomerates. In effect, independent choices are narrowing.

Equally troubling is the politicization of the news. Conservatives have long argued that traditional broadcast TV and cable news shows such as CNN have a liberal bias. True or false, few people match Murdoch for using his business holdings to advance his own conservative political views. The media empire Rupert Murdoch has built is a business marvel to behold, but the media concentration it represents should concern Washington and the public.